Medicare’s Physician Fee Schedule

Taking Apart and Reassembling the MPFS into A Leaner, More User-Friendly Form

Author

Andrew Allen Bruce

Last updated

July 21, 2024

Overview

This file contains information on services covered by the MPFS in 2024. For more than 10,000 physician services, the file contains the associated RVUs, a fee schedule status indicator, and various payment policy indicators needed for payment adjustment (i.e., payment of assistant at surgery, team surgery, bilateral surgery, etc.).

The MPFS amounts are adjusted to reflect the variation in practice costs from area to area. A GPCI has been established for every Medicare payment locality for each of the three components of a procedure’s RVU:

  1. Physician Work
  2. Practice Expense
  3. Malpractice Expense (sometimes called Professional Liability Insurance)

The GPCIs are applied in the calculation of a fee schedule payment amount by multiplying the RVU for each component times the GPCI for that component.

Payment Formulas

\(RVU_w\) Work Relative Value Unit
\(GPCI_w\) Work Geographic Practice Cost Index
\(RVU_p\) Practice Expense Relative Value Unit
\(GPCI_p\) Practice Expense Geographic Practice Cost Index
\(RVU_m\) Malpractice Relative Value Unit
\(GPCI_m\) Malpractice Geographic Practice Cost Index
\(CF\) Conversion Factor


The formulas for the 2024 MPFS payment amounts are as follows:

Participating

\[ x = [(RVU_w \times GPCI_w) + (RVU_p \times GPCI_p) + (RVU_m \times GPCI_m)] \times CF \]

Non-Participating

\[ y = 0.95x \]

Limiting Charge

\[ z = 0.95(1.15x) \]

Many Ways to Say the Same Thing

As there is a corresponding GPCI value for each of the three components of an RVU, the formula is essentially the dot product of the RVU and GPCI vectors, multiplied by the conversion factor:


\[ a \cdot b = a_1b_1 + a_2b_2 + a_3b_3\]

Setting up the variables:

wrvu  = 6.26   # Work RVU
wgpci = 1      # Work GPCI

pgpci = 0.883  # Practice GPCI
prvu  = 4.36   # Practice RVU

mrvu  = 0.99   # Malpractice RVU
mgpci = 1.125  # Malpractice GPCI

cf    = 32.744 # Conversion Factor


Basic Calculation:

((wrvu * wgpci) + 
   (prvu * pgpci) + 
   (mrvu * mgpci)) * cf
[1] 367.5065


With base R’s Matrix Multiplication Infix Operator:

as.vector(
  c(wrvu, prvu, mrvu) %*% 
  c(wgpci, pgpci, mgpci) * cf)
[1] 367.5065


With the pracma package’s dot() function:

pracma::dot(
  c(wrvu, prvu, mrvu), 
  c(wgpci, pgpci, mgpci)) * cf
[1] 367.5065


With the northstar package’s calculate_amounts() function:

calculate_amounts(
  wrvu  = 6.26,
  nprvu = 7.92,
  fprvu = 4.36,
  mrvu  = 0.99,
  cf    = 32.744,
  wgpci = 1,
  pgpci = 0.883,
  mgpci = 1.125
)
Facility Amounts:

RVU Total ............ 11.22
Participating ........ $367.51
Non-Particpating ..... $349.13
Limiting Charge ...... $401.50

Non-Facility Amounts:

RVU Total ............ 14.37
Participating ........ $470.44
Non-Particpating ..... $446.91
Limiting Charge ...... $513.95
Non-Facility vs. Facility

Under the MPFS, many procedures have separate payment amounts for physician services when provided in facility and non-facility settings.

The amount is determined by the Place of Service (POS) code. In general, the POS code reflects the actual place where the patient receives the face-to-face service and determines whether the facility or non-facility payment rate is paid.

Services rendered to a patient who is an inpatient of a hospital (POS code 21) or an outpatient of a hospital (POS codes 19 or 22), the facility rate is paid, regardless of where the face-to-face encounter with the patient occurred.


Therapy Code Capitation

Certain therapy codes will receive a 50% reduction to the Practice Expense.

Section 5102(b) of the Deficit Reduction Act of 2005 requires a payment cap on the Technical Component (TC) of certain diagnostic imaging procedures and the TC portions of the global diagnostic imaging services.

This cap is based on the Outpatient Prospective Payment System (OPPS) payment. To implement this provision, the Physician Fee Schedule amount is compared to the OPPS payment amount and the lower amount is used in the formula to calculate payment.

Accepting Assignment

Accepting assignment means that a healthcare provider or facility is partnered with Medicare and is required by law to charge only the Medicare-approved amount for various services. This amount is preset by Medicare and is often less than many healthcare facilities would charge.

Because of this, when patients receive care at a facility that accepts assignment, they will be required to pay lower out-of-pocket costs as Medicare will cover the full amount of the service cost. Personal costs only include the premium and any charges up to the deductible amount.

Physicians or facilities that do not accept assignment are a non-participating providers. All physicians are required to file with Medicare, indicating that they either accept or do not accept assignment. If a provider does not accept assignment, it means that they are not required to charge only the Medicare-approved amount for services.

Limiting Charge

One possible option for non-participating providers is to choose to accept assignment for some services but to decline assignment for others. For services that they accept assignment for, they are only able to bill the Medicare-approved amount. However, for other services, they are allowed to charge up to 15 percent more than the Medicare-approved amount.

This limit cap is known as the limiting charge. Providers that do not fully participate only receive 95 percent of the Medicare-approved amount when Medicare reimburses them for the cost of care. In turn, the provider can charge the patient up to 15 percent more than this reimbursement amount. This extra charge will not be covered by Medicare, which causes Medicare recipients to incur greater out-of-pocket costs.

The Medicare limiting charge is the maximum amount a Non-Participating Provider can charge for services submitted on a non-assigned claim. This is that maximum amount a beneficiary could legally be charged.

Calculation

The Medicare limiting charge is, by law, set at \(115\%\) of the payment amount for the service furnished by the Non-Participating Physician.

However, the law sets the payment amount for Non-Participating Physicians at \(95\%\) of the payment amount for Participating Physicians (i.e., the Fee Schedule amount).

Calculating \(95\%\) of \(115\%\) of an amount, \(x\), is equivalent to \(x \times 1.0925\) (or \(109.25\%\)):

# 95% of 115% of 10
(10 * 1.15) * 0.95 
[1] 10.925
# 109.25% of 10
10 * 1.0925 
[1] 10.925
# using the northstar package
limiting_charge(10)
[1] 10.925

Relative Value File

This file contains information on services covered by the Medicare Physician Fee Schedule (MPFS). For more than 10,000 physician services, the file contains the associated relative value units (RVUs), a fee schedule status indicator, and various payment policy indicators needed for payment adjustment (i.e., payment of assistant at surgery, team surgery, bilateral surgery, etc.).

The Medicare physician fee schedule amounts are adjusted to reflect the variation in practice costs from area to area. A geographic practice cost index (GPCI) has been established for every Medicare payment locality for each of the three components of a procedure’s relative value unit (i.e., the RVUs for work, practice expense, and malpractice). The GPCIs are applied in the calculation of a fee schedule payment amount by multiplying the RVU for each component times the GPCI for that component.

Modifiers

Status Codes

Indicates whether the code is in the fee schedule and whether it is separately payable if the service is covered. See Attachment A for description of values.

Only RVUs associated with status codes of A, R, or T, are used for Medicare payment.

PC/TC Indicator

Global Surgery Days

Provides time frames that apply to each surgical procedure.

Operative Percentages

Indicators

Procedures Rarely/Never Performed

An NA in this field indicates that this procedure is rarely or never performed in the Facility setting:

An NA in this field indicates that this procedure is rarely or never performed in the Non-Facility setting:

Multiple Procedures

Indicates applicable payment adjustment rule for multiple procedures (modifier 51).

Payment Amount File

This file contains locality-specific physician fee schedule payment amounts for services covered by the Medicare Physician Fee Schedule (MPFS) with one record for each unique combination of carrier, locality, procedure code and modifier.

mac

Carrier Number

Medicare Administrative Contractor ID

locality

Locality

Pricing Locality ID

hcpcs

HCPCS Code

HCPCS Code

mod

Modifier

Diagnostic Tests, NA denotes Global Service, Mods 26 & TC identify Components. Mod 53 indicates Separate RVUs & PFS Amount for Procedures Terminated Before Completion.

status

Status Code

Indicates if in Fee Schedule, if Covered, if Separately Payable. Only A, R and T used for Medicare payment.

mult_surg

Multiple Surgery Indicator

Indicates Applicable Payment Adjustment Rule: Mod 51

flat_vis

Flat Rate Visit Fee

Contains Flat Visit Fee for Primary Care First Model

nther

Non-Facility Therapy Reduction

Fee reflects 50% PE payment for Non-facility services

fther

Facility Therapy Reduction

Fee reflects 50% PE payment for Facility services

fee_nf

Non-Facility Fee Schedule Amount

Non-Facility Pricing Amount

fee_f

Facility Fee Schedule Amount

Facility Pricing Amount

opps

OPPS Indicator

OPPS Payment Cap Determination: 1 = Applies, 9 = Does Not Apply

opps_nf

OPPS Non-Facility

OPPS Capped Non-Facility Pricing Amount

opps_f

OPPS Facility

OPPS Capped Facility Pricing Amount

GPCIs

2024 Geographic Practice Cost Indices // by State & Medicare Locality

MAC1 Locality Work Practice Malpractice
AL 10112 00 ALABAMA2 1 0.869 0.575
AK 02102 01 ALASKA 1.5 1.081 0.592
AZ 03102 00 ARIZONA 1 0.975 0.854
AR 07102 13 ARKANSAS 1 0.86 0.518
CA 01112 54 BAKERSFIELD 1.017 1.093 0.662
01112 55 CHICO 1.014 1.093 0.56
01182 71 EL CENTRO 1.014 1.093 0.57
01112 56 FRESNO 1.014 1.093 0.56
01112 57 HANFORD-CORCORAN 1.014 1.093 0.56
01182 18 LOS ANGELES-LONG BEACH-ANAHEIM (LOS ANGELES/ORANGE CNTY) 1.042 1.194 0.69
01112 58 MADERA 1.014 1.093 0.56
01112 59 MERCED 1.014 1.093 0.56
01112 60 MODESTO 1.014 1.093 0.56
01112 51 NAPA 1.058 1.31 0.521
01182 17 OXNARD-THOUSAND OAKS-VENTURA 1.026 1.183 0.651
01112 61 REDDING 1.014 1.093 0.56
01112 62 RIVERSIDE-SAN BERNARDINO-ONTARIO 1.014 1.093 0.892
01112 63 SACRAMENTO-ROSEVILLE-FOLSOM 1.034 1.156 0.56
01112 64 SALINAS 1.035 1.165 0.56
01182 72 SAN DIEGO-CHULA VISTA-CARLSBAD 1.028 1.191 0.572
01112 05 SAN FRANCISCO-OAKLAND-BERKELEY (SAN FRANCISCO/SAN MATEO/ALAMEDA/CONTRA COSTA CNTY) 1.088 1.419 0.445
01112 52 SAN FRANCISCO-OAKLAND-BERKELEY (MARIN CNTY) 1.088 1.419 0.47
01112 65 SAN JOSE-SUNNYVALE-SANTA CLARA (SAN BENITO CNTY) 1.1 1.435 0.56
01182 73 SAN LUIS OBISPO-PASO ROBLES 1.014 1.132 0.56
01112 09 SAN JOSE-SUNNYVALE-SANTA CLARA (SANTA CLARA CNTY) 1.1 1.435 0.42
01112 66 SANTA CRUZ-WATSONVILLE 1.017 1.209 0.56
01182 74 SANTA MARIA-SANTA BARBARA 1.022 1.175 0.56
01112 67 SANTA ROSA-PETALUMA 1.027 1.232 0.56
01112 68 STOCKTON 1.014 1.093 0.56
01112 53 VALLEJO 1.058 1.31 0.47
01112 69 VISALIA 1.014 1.093 0.56
01112 70 YUBA CITY 1.014 1.093 0.56
01112 75 REST OF CALIFORNIA 1.014 1.093 0.56
CO 04112 01 COLORADO 1.008 1.053 0.827
CT 13102 00 CONNECTICUT 1.022 1.091 1.207
DC 12202 01 DC + MD/VA SUBURBS 1.057 1.192 1.168
DE 12102 01 DELAWARE 1.009 0.992 0.949
FL 09102 03 FORT LAUDERDALE 1 0.998 1.77
09102 04 MIAMI 1 1.027 2.5
09102 99 REST OF FLORIDA 1 0.94 1.467
GA 10212 01 ATLANTA 1 0.997 1.128
10212 99 REST OF GEORGIA 1 0.883 1.125
HI 01212 01 HAWAII, GUAM 1 1.149 0.561
ID 02202 00 IDAHO 1 0.908 0.461
IL 06102 16 CHICAGO 1.007 1.023 2.018
06102 12 EAST ST. LOUIS 1 0.918 1.784
06102 15 SUBURBAN CHICAGO 1.007 1.048 1.556
06102 99 REST OF ILLINOIS 1 0.912 1.381
IN 08102 00 INDIANA 1 0.922 0.485
IA 05102 00 IOWA 1 0.913 0.457
KS 05202 00 KANSAS 1 0.906 0.54
KY 15102 00 KENTUCKY 1 0.877 0.913
LA 07202 01 NEW ORLEANS 1 0.935 1.156
07202 99 REST OF LOUISIANA 1 0.881 0.982
ME 14112 03 SOUTHERN MAINE 1 1.012 0.656
14112 99 REST OF MAINE 1 0.913 0.65
MD 12302 01 BALTIMORE/SURR. CNTYS 1.02 1.078 1.309
12302 99 REST OF MARYLAND 1.012 1.016 0.973
MA 14212 01 METROPOLITAN BOSTON 1.042 1.197 0.894
14212 99 REST OF MASSACHUSETTS 1.017 1.061 0.796
MI 08202 01 DETROIT 1.003 0.986 1.718
08202 99 REST OF MICHIGAN 1 0.911 1.173
MN 06202 00 MINNESOTA 1 1.025 0.3
MS 07302 00 MISSISSIPPI 1 0.852 0.768
MO 05302 02 METROPOLITAN KANSAS CITY 1 0.948 0.992
05302 01 METROPOLITAN ST. LOUIS 1 0.952 0.994
05302 99 REST OF MISSOURI 1 0.859 0.974
MT 03202 01 MONTANA3 1 1 0.978
NE 05402 00 NEBRASKA 1 0.917 0.304
NV 01312 00 NEVADA3 1 1 0.844
NH 14312 40 NEW HAMPSHIRE 1 1.034 0.898
NJ 12402 01 NORTHERN NJ 1.064 1.172 1.032
12402 99 REST OF NEW JERSEY 1.042 1.106 1.069
NM 04212 05 NEW MEXICO 1 0.908 1.172
NY 13202 01 MANHATTAN 1.065 1.166 1.656
13202 02 NYC SUBURBS/LONG ISLAND 1.065 1.2 1.911
13202 03 POUGHKPSIE/N NYC SUBURBS 1.046 1.106 1.269
13292 04 QUEENS 1.065 1.195 1.462
13282 99 REST OF NEW YORK 1 0.949 0.732
NC 11502 00 NORTH CAROLINA 1 0.926 0.665
ND 03302 01 NORTH DAKOTA3 1 1 0.517
OH 15202 00 OHIO 1 0.911 1.033
OK 04312 00 OKLAHOMA 1 0.891 0.813
OR 02302 01 PORTLAND 1.013 1.103 0.688
02302 99 REST OF OREGON 1 0.986 0.643
PA 12502 01 METROPOLITAN PHILADELPHIA 1.024 1.053 1.177
12502 99 REST OF PENNSYLVANIA 1 0.927 0.925
PR 09202 20 PUERTO RICO 1 1.007 0.982
RI 14412 01 RHODE ISLAND 1.025 1.039 0.849
SC 11202 01 SOUTH CAROLINA 1 0.913 0.817
SD 03402 02 SOUTH DAKOTA3 1 1 0.382
TN 10312 35 TENNESSEE 1 0.896 0.544
TX 04412 31 AUSTIN 1 1.046 0.914
04412 20 BEAUMONT 1 0.903 0.947
04412 09 BRAZORIA 1.014 1.006 0.795
04412 11 DALLAS 1.011 1.007 0.877
04412 28 FORT WORTH 1.011 0.998 0.902
04412 15 GALVESTON 1.014 1 0.855
04412 18 HOUSTON 1.014 1.003 1.409
04412 99 REST OF TEXAS 1 0.945 0.934
UT 03502 09 UTAH 1 0.933 0.93
VT 14512 50 VERMONT 1 0.993 0.518
VA 11302 00 VIRGINIA 1.002 0.984 0.755
VI 09202 50 VIRGIN ISLANDS 1 1.007 0.982
WA 02402 02 SEATTLE (KING CNTY) 1.043 1.22 0.853
02402 99 REST OF WASHINGTON 1.007 1.04 0.803
WV 11402 16 WEST VIRGINIA 1 0.862 1.333
WI 06302 00 WISCONSIN 1 0.957 0.331
WY 03602 21 WYOMING3 1 1 0.739

Note: The Further Continuing Appropriations and Other Extensions Act, 2024 (Section 501) extended the 1.0 Work GPCI floor through January 19, 2024. Therefore, the Work GPCIs for 2023 reflect the 1.0 Work GPCI floor. Work GPCIs for 2024 are shown both with and without a 1.0 floor and Work GPCIs for 2025 do not reflect a 1.0 floor.

1 MAC assignments as of November 22, 2023
2

Work GPCI reflects a 1.5 floor in Alaska established by MIPPA.

3 PE GPCI reflects a 1.0 floor for Frontier States established by the ACA.
Back to top